A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

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Topic: Government and Politics

“Small Government Returns as [Republican] Maxim,” headlines the Washington Post.

The unanimous vote by House Republicans against President Obama’s stimulus plan provided an early indication that the GOP hopes to regain power by becoming the champion of small government, a reputation many felt slipped away during the high-spending Bush years.

But small-government voters may not be persuaded that the GOP has returned to its principles on the basis of one vote against a bill proposed by the other party, which happens to be, in the words of Republican whip Eric Cantor, likely “the largest spending bill in history.”

Like a wife whose husband has strayed dozens of times over the past eight years, small-government voters may not feel that one Valentine’s Day present is enough to restore trust. Especially when some of the prodigal Republicans are even now saying that they might vote for the largest spending bill in history on final passage.

That’s what Steve Horwitz says here. Like the PATRIOT Act, it’s a preexisting wishlist of initiatives being rammed through in an atmosphere of hysteria. Where the Obama administration has, to its credit, backed away from the language of war and crisis when it comes to international affairs and homeland security, the Obama team seems all too willing to revert to Bush-style fearmongering in the service of greater state involvement in the economy.

Yesterday’s coverage in the New York Times (of all places) suggests that the stimulus package is a Trojan Horse effort designed to make dramatic and likely permanent changes in the federal role in health care and education, among other things:

Altogether, the economic recovery bill would speed $127 billion over the next two and a half years to individuals and states for health care alone, a fact that has Republicans fuming that the stimulus package is a back door to universal health coverage…. The federal share of Medicaid spending now ranges from 50 percent in higher-income states like New York and Connecticut to more than 73 percent in poor states like Mississippi and West Virginia. Under the House bill, the federal share would be increased by at least 4.9 percentage points in every state, and by much more in states with large increases in unemployment.

Critics and supporters alike said that by its sheer scope, the measure could profoundly change the federal government’s role in education, which has traditionally been the responsibility of state and local government…. In recent years the federal government has contributed 9 percent of the nation’s total spending on public schools, with states and local districts financing the rest. Washington has contributed 19 percent of spending on higher education. The stimulus package would raise those federal proportions significantly. The Department of Education’s discretionary budget for the 2008 fiscal year was about $60 billion. The stimulus bill would raise that to about $135 billion this year, and to about $146 billion in 2010. Other federal agencies would administer about $20 billion in additional education-related spending. “This really marks a new era in federal education spending,” said Edward Kealy, executive director of the Committee for Education Funding, a coalition of 90 education groups.

“There are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans,” President Obama observed in his [inaugural] address. “Their memories are short,” he said, “for they have forgotten what this country has already done, what free men and women can achieve when imagination is joined to common purpose and necessity to courage.”

This is a tediously familiar and dangerous message. Can you recall the scale of our recent ambitions? The United States would invade Iraq, refashion it as a democracy and forever transform the Middle East. Remember when President Bush committed the United States to “the ultimate goal of ending tyranny in our world”? That is ambitious scale.

Not only have some of us forgotten “what this country has already done … when imagination is joined to a common purpose,” it’s as if some of us are trying to erase the memory of our complicity in the last eight years—to forget that in the face of a crisis we did transcend our stale differences and cut the president a blank check that paid for disaster. How can we not question the scale of our leaders’ ambitions? How short would our memories have to be?

In its lead editorial today, the New York Times dismisses criticism of the stimulus bill that passed the House last night as “mostly ideological.” Similarly, a McClatchy News story about the economists who signed Cato’s newspaper advertisement opposing the stimulus bill, dismissed signers as “ideologically opposed” to government spending. This is part of a trend we’ve seen since President Obama’s election. Opposition to Obama’s programs is dismissed as “ideological,” whereas the belief by President Obama and Congressional Democrats in ever bigger and more activist government is, in the word’s of EJ Dionne, “anti-ideological.”

After all, President Obama has called for “a new declaration of independence, not just in our nation, but in our own lives — from ideology and small thinking, prejudice and bigotry.”

Apparently then, to believe in free-markets, limited government, and individual liberty is to be “ideological,” on a par with being a small-thinking bigot. On the other hand, to believe that government should run more and more of our lives, that government functions better than markets, and that government should redistribute wealth is…what?

This country was founded by men who believed in such ideological ideas as “all men are created equal” and are “endowed by the creater with certain unailenable rights.” Since when is that a bad thing?

Leaving aside the many other disastrous implications of the pork-laden “stimulus” bill, here are some thoughts about its impact on international trade. For all practical purposes there is no difference between the Smoot-Hawley tariff bill of 1930 and the “Buy American” provisions in the $819 billion spending bill that passed the House Wednesday.

Smoot-Hawley was the catalyst for a pandemic of tit-for-tat protectionism around the world, which helped deepen and prolong the global depression in the 1930s. “Buy American” provisions will no doubt inspire similar trade barriers abroad and will have the same effect of reducing global trade—and therefore prospects for economic recovery. It is not unreasonable to say that U.S. policymakers are on the verge of taking us down that same disastrous path.

The bill that passed the House includes the following language:

None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron and steel used in the project is produced in the United States.

The version currently before the Senate contains the same language, which would seem to indicate that scrapping the provision won’t be necessary to reconcile the two versions in conference. So, unless the “Buy American” clause is dropped in the final Senate bill or is somehow defused during conference, the U.S. will have fired the first shot in what could evolve into a much wider trade war.

It’s usually better to be circumspect and to issue such dire warnings sparingly, but I see little room for alternative conclusions here.

When President Obama signs the Lilly Ledbetter Fair Pay Act, he will be fulfilling a campaign promise but undermining the American economy. This bill is not about sex discrimination — paying men and women different wages for the same job has been illegal for nearly half a century — but rather about statutes of limitations. How long after an incident of discrimination should someone be allowed to sue? The Supreme Court ruled that an employee has six months after a company’s initial pay decision to file a discrimination claim. While this was a fair reading of existing law, critics legitimately questioned whether the law itself unfairly foreclosed redress for a decision made long before an employee discovered the pay discrimination. They correctly went to Congress to fix the law, instead of demanding that courts rewrite it themselves.

But the solution is not to eliminate statutes of limitations altogether, which is essentially what the Fair Pay Act does when it restarts the litigation clock with every new paycheck. No, the proper solution is simply to codify the common law “discovery rule” for these types of cases, making clear that the statute of limitations begins to run only when the employee discovers the wrong that had been committed against her way back when — a compromise that was proposed by Senator Kay Bailey Hutchison but rejected by the Senate. Instead, the new law introduces major uncertainty into business operations and gives every employee a Sword of Damocles to dangle over her employer’s balance sheet. Companies will all of a sudden be subject to decades-old discrimination claims they have no ability to defend.

At bottom, the Lilly Ledbetter Fair Pay Act takes a bludgeon to an already reeling economy, acting as a stimulus only for the lawyers bringing and defending the coming avalanche of lawsuits.